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Key Performance Indicators of Selling on Amazon

 

When top performing athletes are in the thick of the match, whether it be Patrick Mahomes, LeBron James, or Derek Jeter, there is a separate game of analysis going on in each and every one of their heads. It’s not enough to focus on the play at hand, you have to also have your eye and thoughts on the SCOREBOARD!

The same is to be said for the business world. It’s not enough to sell, sell, SELL, you also have to be mindful of all the proper performance metrics. A breakout market through which to sell has been Amazon’s FBA program, and for that reason, today we’re going to talk about some of the key performance indicators, or scoring metrics, to consider as you push your business. Let’s dig in, play ball!

Attention-Based Indicators

Impressions

There are a good handful of metrics to follow while you go about your Amazon selling, but quite possibly the most basic number to watch is that of impressions. This paints you a picture of just how many eyes have landed on your sponsored products on the Amazon platform. While a high impression count does not necessarily mean high sales, nor a low impression count meaning low sales, it is certainly beneficial to get as many impression as possible to improve your pool of potential buyers.

Clicks

Out of all of the impressions that your product advertisements receive, there will be an amount of people that engage with your ads and decide to take a step further. This will be conveyed in the metric known as Clicks, as it is literally people that have clicked your ads. While impressions are important, increased clicks is the ultimately the goal in attention-getting, so give this additional consideration and care.

Click-Through Rate

In basketball, your field goal percentage is an important figure. What this figure essentially means is how many shots you have made relative to the number of shots you have taken. The higher your field goal percentage, the better! There is a term for this in Amazon FBA, and that term is Click-Through Rate, meaning clicks achieved relative to impressions made. While you boost your overall Clicks, you’ll want to assess your ad positioning, see if it’s ideally placed for the best attention possible, and optimize from there for increased Click-Through Rate as well.

Cost

Spend

To have advertising active, meaning to have your ads placed on a piece of digital Amazon advertising space related to a certain keyword, you will have to bid for that space and then ultimately pay an amount relative to that bid in the event that there are Clicks or engagement on those ads. This figure, referring to the total amount you are spending for advertising engagement, is called Ad Spend. Same as impressions, a high or low Ad Spend are not inherently good, but instead can only be properly assessed in comparison to Sales by means of Advertising Cost of Sale, which will be touched on later.

Cost Per Click

You have your number of Clicks or engagements as mentioned earlier, and then you have your Ad Spend, as we previously discussed a second ago. Your Cost per Click is the average cost of each Click relative to your total Ad Spend. Depending on your industry, more so micro figures like this may be important, but otherwise, they may serve simply to provide an additional gauge of your performance.

Advertising Cost of Sale (ACoS)

In baseball, a pitcher’s earned run average determines their efficiency with each pitch, or how well they can maintain low runs or points scored by the opponent with their overall pitch count. Advertising Cost of Sale works similarly, measuring an Amazon seller’s efficiency and ability to maintain low Ad Spend costs. Your ACoS is your Ad Spend divided by your Sales, so the lower you can get that number the better! This will serve as one of your most crucial metrics in selling on Amazon, so pay extra special attention to it!

Selling

Sales

There is a lot of importance to all of the metrics outlined above, but there is only one sole purpose behind why you are on Amazon to begin with; to push SALES on your product that you designed to bring values to lives of others and help them satisfy a need! Everything you are doing on the platform should ultimately be done with the goal in mind of performing as highly as possible on this KPI, so keep that at the forefront of your mind as you undergo the Amazon selling process!

Conclusion

To conclude, there is a lot to selling on Amazon, to say the least. However, one thing that will keep you ahead of the pack is having a clear understanding of all the metrics to track as part of your selling scoreboard. Use this article to serve as a great resource for you moving forward, and for professional guidance in setting up and managing your Amazon seller operations, contact the pros at Grey Suit Retail!

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